The fashion industry’s ambitious push towards circularity, specifically in textile-to-textile recycling, has experienced a dramatic narrative arc this year. What began with a sense of impending doom has transformed into a renewed surge of investment and strategic collaboration.
Earlier this year, the sector faced a significant setback with the bankruptcy of pioneering recycler Renewcell. This high-profile failure exposed vulnerabilities in the emerging industry, highlighting the critical need for robust infrastructure and scalable technologies. A market downturn exacerbated the situation, making it challenging for startups to secure crucial funding.
However, this crisis appears to have ignited a powerful response. Rather than retreating, the fashion industry has rallied, demonstrating a commitment to building a more sustainable future. A wave of brands has stepped up, signing substantial purchasing agreements with recycling startups. These commitments, promising to buy significant volumes of recycled textiles once new facilities reach commercial scale, have been instrumental in unlocking new funding and de-risking investments. This influx of capital signals a strong belief in the future of recycled materials.
Key developments highlight this resurgence:
- Renewcell’s Rebirth: Following its bankruptcy, Renewcell has been acquired by private equity firm Altor Equity Partners and rebranded as Circulose. The company is adopting a revised strategy, prioritizing securing demand for its recycled materials before resuming full mill operations.
- Major Investments: Syre, a new polyester recycling venture backed by H&M Group and Vargas, has secured $160 million in funding, underpinned by a massive $600 million offtake agreement with H&M.
- Supplier Engagement: Manufacturing giant MAS has pledged to purchase thousands of meters of recycled polyester from Ambercycle, marking a significant step in integrating recycled materials into the supply chain.
- Vertical Integration: Denim producer Isko, through its parent company Sanko, has launched its own recycling venture, Re&Up, demonstrating a commitment to closing the loop within its own operations.
This shift reflects a crucial learning curve. The industry is now focusing on securing firm demand commitments and establishing clear pathways for new materials through complex supply chains. Circulose, for example, is prioritizing building a solid customer base before restarting its mill. Ambercycle’s agreement with MAS provides crucial credibility for securing financing for its commercial plant.
Despite this positive momentum, the industry acknowledges that significant further investment is required to fully realize its recycling ambitions. Estimates suggest a need for hundreds of billions of dollars. The success of this “second act” will determine whether this crucial funding materializes.
As Nicole Rycroft, founder of Canopy, aptly stated regarding Renewcell’s rescue, this is a “second chance” that “must not be wasted.” The fashion industry’s commitment to circularity is being put to the test, and the recent developments suggest a renewed determination to create a truly sustainable future.
